Health & Medicine

Struggling Kentucky ambulance services could double Medicaid money under new proposal

Financially strapped ambulance services in Kentucky are throwing their support behind a proposed bill that could double how much they’re paid to transport Medicaid patients.

“Our EMS services are struggling to get by, and we’re trying to come up with different ways of developing more revenue streams,” bill co-sponsor Rep. Rob Rothenburger, R-Shelbyville, told the General Assembly’s interim Joint Committee on Health, Welfare, and Family Services on Monday.

The pre-filed bill for the 2020 legislative session would allow ground ambulance services across the state to seek more in federal Medicaid reimbursements by instituting a payment method similar to one used by hospitals and many other Medicaid providers.

The state permits Medicaid reimbursements when an eligible patient is transported in an emergency condition. Non-emergency patients are covered only if they’re confined to a bed or if they have to be moved using a stretcher — a status that only applies to about 7 percent of all emergency calls, according to Jim Duke, who serves on the reimbursement committee for the Kentucky Ambulance Providers Association (KAPA), which represents roughly 130 emergency providers.

Emergency providers, though, say they’re reimbursed at a fraction of their actual cost to transport Medicaid patients.

In rural Kentucky, swelling numbers of Medicaid patients have wrought financial burdens and, in some cases, forced communities to privatize and share ambulance services, Duke said.

Upwards of 1.3 million Kentuckians — more than 20 percent of the population — are Medicaid recipients, according to state data from August. Statewide, ambulance services get about 9 percent of their revenue from Medicaid reimbursements.

In some Eastern Kentucky counties, Medicaid patients account for more than half of all EMS runs, but make up only about 20 percent of revenue, said Duke, who owns Com-Care, Inc., a provider of emergency services to five rural western counties.

The average cost for transporting a Medicaid patient in one ambulance trip can run anywhere from $350 to $750, Duke said, referencing KAPA data. In 2018, on average, Medicaid covered $145 of that cost per ambulance run, that data shows. Meaning providers risk losing between $204 and $605 per call.

This bill would create an ambulance service assessment revenue fund within the state treasury and require all ambulance service providers to submit a self-imposed provider tax — likely 6 percent of their quarterly emergency revenue. Those dollars, in turn, would be matched 2:1 with federal Medicaid reimbursement dollars and then divvied among providers to supplement the cost of serving Medicaid patients.

Reimbursement rates could double to $250 if the bill is enacted, though the goal is to eventually reach $450 in reimbursements, which is on par with Medicare reimbursement rates, Duke said. Statewide, this change could result in an additional $26 million in federal matching funds.

The current financial disparity has forced many EMS services into privatization. For private providers like Terry Fraley, who operates NET Care Ambulance Service with his wife in Martin, Floyd and Lawrence counties, they regularly take a financial for transporting Medicaid patients.

“I’m practically losing money on every call,” Fraley said Wednesday. “If it’s not break-even, we’re losing. There’s no room for profit.”

Since January, Fraley said, 24 percent of their revenue came from Medicaid reimbursements. Making up the financial difference often means employees don’t get raises, or they can’t offer competitive wages to begin with, Fraley said.

For public providers, paying the difference between Medicaid reimbursement rates and actual costs falls to individual communities and taxpayers.

In many cases, “the local taxpayer is actually subsidizing this Medicaid program,” Duke said. “What we’re trying to do is fix that.”

Last year, Madison County EMS provided care to 2,842 Medicaid patients and the average cost to transport each of them was $350. On average, $112 in reimbursements were provided to the department, creating a budget shortfall of more than $676,000 that fell to taxpayers, according to KAPA data.

If the bill is enacted, Madison County could see a net increase in its reimbursements of about $462,000 — still not enough to meet the total cost of services, but much closer.

Kentucky Medicaid Commissioner Carol Steckel said one downside to the bill is that communities with low Medicaid populations risk paying more in assessments than they would receive in reimbursements.

“We cannot guarantee someone their tax back, one for one,” Steckel told committee members. “There will have to be winners and losers,” but equalizing it as much as possible “is what we’ll try to do.”